Lynas Rare Earths Limited · ASX:LYC
Lynas Rare Earths — Lynas — Shareholder Meeting (November 2005)
34 slides from Lynas Rare Earths's shareholder meeting presentation, Nov 29, 2005
Slide 1: Annual General Meeting November 2005
Ci yy Annual General Meeting 30 November 2005 Presented by Nicholas Curtis Executive Chairman 5 CORPORATION LTD
Slide 2: p> The information contained in this presentation has been prepared
p> The information contained in this presentation has been prepared using the information available to Lynas Corporation Limited (Lynas) at the time of preparation of the presentation. » For further information about Lynas, you can obtain a copy of all recent ASX announcements made by Lynas at www.
Slide 3: Contents
Contents » Achievements over the past year » Rare Earths Project « Market changes « Current status of Rare Earths project « Value of Rare Earths project « Realising this value and development schedule » Rare Metals Project
Slide 4: Achievements over the past year: Rare Earths Project
Achievements over the past year Rare Earths Project > VVVW VY Successfully completed Definitive Feasibility Study for Rare Earths Upstream Project, including the integration of the concentrator to the site in China Signed Land Purchase Agreement for the Chinese integrated processing plant site in De
Slide 5: Achievements over the past year: Rare Metals and Corporate
Achievements over the past year Rare Metals Project » Announced globally significant niobium-rich Rare Metals resource September 2004 » Reviewed process flow sheet, marketable products and metal prices as of November 2005, which has increased potential revenues and margins Corporate » Relocated Chin
Slide 6: Tracker
Tracker. » Achievements over the past year >» Rare Earths Project « Rare Earths market « Current status of Rare Earths project « Value of Rare Earths project « Realising this value and develooment schedule » Rare Metals Project
Slide 7: Rare Earths applications
ur & Light Polishing Powders e Cerium Phosphor for CRT & PDP scr Europium / Yttrit Terbium / Yttrium Glass Screens Cerium Neodymium, Non-toxic coatings (Lead 'Replacement) _ Yttrium? |
Slide 8: Rare Earths have many applications in the automotive industry
Rare Earths have many applications in the automotive industry Toyota Prius Hybrid Vehicte estan eee snore es sata ka 7 UV cut ane ee glass Car body primers polishing powder * Cerium and anti-corrosive » Cerium coatings e Yttrium its Braking BeteN Booster lan Diesel Fuel Engine Additive Sensors « Cer
Slide 9: Electronics is also a key industry for Rare Earths
... Electronics is also a key industry for Rare Earths In iz ireuit « Ultra high purity Ce polishes silicon Speakers a j wafer » Nd magnet in PC and NEC Notebook powered by integrated Fuet Cet! Notebook speakers « Nd magnets in headphones of Ipod SCEBGD and MP3 Players *« Eu, Th phosphors ~ CRT & PD
Slide 10: Rare Earths market developments
Rare Earths market developments Demand » Rare Earths demand enters a period of sustained growth, 8% p.a. (~ 8,000 tpa), driven by growth in existing and new applications (e.g. hybrid vehicie) Supply » China continues to dominate the world’s supply of Rare Earths (~95%) » Chinese government enforced
Slide 11: Supply-demand imbalance suggest price increases over the next few years
Supply - demand imbalance suggest price increases will occur over the next few years Rare Earths market history and independent forecast (REO Metric 2 (USS$/kg} Tonnes) o 7.00 7 ; 125000 = 3 6.00 + fe) + 100000 3 Lu 8 m © = 500} oO a 2 c 2 3 400 t + 75000 tee < id 3.00 « o 2° + 50000 9 & 2 2.00 + Fl
Slide 12: Tracker
Tracker. » Achievements over the past year » Rare Earths Project « Rare Earths market « Current status of Rare Earths project « Value of Rare Earths project « Realising this value and develooment schedule » Rare Metals Project
Slide 13: Strategy: transparent, environmentally sound, integrated supply chain
The strategy is to develop a transparent, environmentally sound, integrated supply chain LOCATION METHOD OUTPUT & REO CONCENTRATION PLANNED PRODCUTION Australia Open Cut Mining Ore 14.8% 121,000 tpa The Upstream Project China Acid Cracking+ initial Flotation ' separation SEG* 97.5% LPN RECI* 45% Ce*
Slide 14: Rare Earths JORC resource with Aboriginal Heritage and Native Title clearances
Rare Earths JORC resource with Aboriginal Heritage and Native Title clearances received The Central Lanthanide Deposit (4% REO cut-off) Grade Category Tonnes (Mt) (%REO) Tonnes REO Measured 1.2 15.7 186,000 Indicated 5.0 11.8 583,000 inferred 1.5 9.9 148,000 Total 7.7 12.0 917,000 JORC standard reso
Slide 15: Environmental approval granted and mining contractor proposals received
Environmental approval granted and mining contractor proposals have been received M3B/058 § seo8000mN Be0s00oRIN, SECTOR ANCHOR SECTOR. _MGB/059. | A A Lynas Legend Carbonatite Alteration Zone a) Country Racks: Oo Rare Metal Resources * Niobium «Tantalum + Titanium + Rare Earths * Zirconium is] 05 i
Slide 16: Transport group proposals received for bulk transport through Esperance
Transport group proposals received for bulk transport and export of ore through Esperance Baio Ma iaverren 1 bags MT WELD WALGOLM SIDING“) PROJECT fA ALIGQORL E- BOULDER, WESTERN AUSTRALIA oe Mae ee
Slide 17: Processing site secured, environmental and project approvals and business licence granted
Processing site secured, environmental and project approvals and business licence granted
Slide 18: Tracker
Tracker. » Achievements over the past year » Rare Earths Project » Rare Earths market « Current status of Rare Earths project « Value of Rare Earths project « Realising this value and develooment schedule » Rare Metals Project
Slide 19: Mt Weld in-situ and recoverable resource value versus other deposits
IN-SITU GRADE RESOURCE DEPOSIT (REO) (REO) RECOVERABLE RESOURCE ( REO) NOTE Baiyun Obo, Baoutou PRC 5% 17,000,000 Mt Weld Rare Earths Project 12% 917,000 Mt Pass, Molycorp USA 8.9% 1,070,000 Nolans Bore, NT Australia 3.1% §75,000 1,700,000 431,500" Mine closed No met work reported Govt pressure to r
Slide 20: The Rare Earths project grows as the plant ramps up volume
The Rare Earths project grows as the plant ramps up volume to 15,000t REO in year 5 (in Million A$) Y4e Y 26 Y3E Vv 4e Y5E i Y4e ¥ 28 Y3E Y4e Y5E
Slide 21: Key Rare Earths BFS financials
Key Rare Earths BFS financials Upstream Project capital expenditure AS 65.5M » Mt Weld pre-strip & ist campaign A$ 15.9M * Shandong integrated plant AS 36.8M ® Contingency AS 4.5M « Ashton debt AS 8.3M Less current funds in Lynas A$ -7.5M Funding requirement A$ 58.0M Ungeared Project IRR 30%
Slide 22: Cash flows of the Rare Earths project including JORC resource
Cash flows of the Rare Earths project including JORC resource Total Revenue Total EBITDA » Reserves only A$1,500 M A$ 500M (Ramp-up to 15,000t in year five and hold) » JORC Resource * A$3,000 M A$ 860M (Potential to continue ramp-up beyond 15,000t) * : Assumed 80% conversion of resource to reserves
Slide 23: Tracker
Tracker. » Achievements over the past year » Rare Earths Project » Rare Earths market « Current status of Rare Earths project » Value of Rare Earths project « Realising this value and development schedule » Rare Metals Project
Slide 24: Realising value in the Rare Earths project
Realising value in the Rare Earths project Customer contracts » Lynas is in advanced commercial discussions with potential customers regarding long term supply contracts » Following a detailed technical review Lynas anticipates signing a Heads of Agreement in the near future with a major customer Pr
Slide 25: Rare Earths project expected development schedule
Rare Earths project expected development schedule [05] STAGE OF DEVELOPMENT Key customer supply contracts Financing completed Australian contractor proposals Detailed design Civil works Equipment installation and commission Dry commissioning Wet commissioning & ramp-up starts » Wet commissioning and
Slide 26: Tracker
Tracker. » Achievements over the past year » Rare Earths Project « Rare Earths market « Current status of Rare Earths project « Value of Rare Earths project » Realising this value and development schedule » Rare Metals Project
Slide 27: Rare Metals resource separate to the Rare Earths resource
Identified the Rare Metals resource, which is totally separate to the Rare Earths resource masse. | & Crown & Coors Rare Metal Deposit.- ps08000nN WEST _9805000%N SECTOR. _ ANCHOR masse | Proposed Rare Earths. Ming SECTOR. 2 3 8 3 m Lynas Legend Carbonatite Alteration Zone Country Rocks ey Rare Meta
Slide 28: Scoping study completed and Rare Metals JORC resource defined
A scoping study has been completed and a Rare Metals JORC resource defined » The Indicated and Inferred resource was defined as 37.7m tonnes in October 2004, recent price increases in the contained metal is likely to increase this resource » The resource estimate for the scoping study only used the
Slide 29: Mt Weld Rare Metals globally significant niobium oxide resource
The Mt Weld Rare Metals resource is a globally significant niobium oxide resource GRADE _IN-SITU DEPOSIT (Nb,0;) | RESOURCE NOTE CBMM Araxa, Brazil 2.5% 11,500,000 t Price maker Mt Weld Rare Metals Project 1.07% 400,000 t World’s 2" largest Mineracao Catalao de GoiasLid 1.34% 240,000 t Anglo-America
Slide 30: Status of Rare Metals Project
Status of Rare Metals Project Revised Engineering Scoping Study Complete » Lynas conducted a scoping study which assessed opex and capex in conjunction with a highly respected Chinese non-ferrous metals research institute » The majority of the ore lies between 30m and 60m in depth, suitable for open
Slide 31: Mt Weld Rare Metals in-situ and recoverable values
Mt Weld Rare Metals in-situ and recoverable values based on JORC resource PROJECT GRADE INSITU INSITU PROPOSED RESOURCE ASB* PRODUCT Tantalum oxide 0.24% 20M Ibs 1.6 Ta metal Niobium oxide 1.07% 400,000 t 8.0 Nb oxide Rare Earths oxide 1.25% 470,000 t 2.3 Mixed RE Cl Zirconium oxide 0.3% 110,000 t 0
Slide 32: Scoping study financial model outcomes
Scoping study financial model outcomes VvYvV ¥ YT ¥ WW YY YF a A Mining Mt Weld — 1M tpa (over 35 year mine life) Resource 38M t (Crown — Coors sectors only) Process concept by Lynas and a Chinese research institute Processing in People’s Republic of China CAPEX USD 434M Directors advise that the sc
Slide 33: Next steps for Rare Metals project
Next steps for Rare Metals project » A feasibility study should be completed on the Rare Metals project given the size of resource and technical and economic strength of the scoping study » The key aspect of the initial feasibility work involves conducting metallurgical test work to verify process f
Slide 34: In summary
In summary Rare Earths feasibility study complete, now ready for detailed engineering Lynas is working on obtaining funding for Rare Earths project; « Phase 1 - Off take contracts...due by 1°! quarter 2006 « Phase 2 - Project financing...due by end 1° quarter 2006 Aiming for positive cash flow mid 2